Loyalty lacking in IT

Buyers of IT products have little sentimentality when it comes to who they do business with, says a US study released just a fortnight ago. This might seem to fly in the face of the adage that business is about relationships. Or does it?

Buyers of IT products have little sentimentality when it comes to who they do business with, says a US study released just a fortnight ago. This might seem to fly in the face of the adage that business is about relationships. Or does it?

It could equally mean that IT companies aren’t very good at maintaining healthy customer relations.

Whichever interpretation you choose, there’s no reason to presume the results would be any different for a similar study in New Zealand.

The research was done by Walker Information in Indianapolis, which surveyed more than 2200 people involved in IT within organisations ranging in size from 50 to 10,000 staff. That’s a healthy sample size, but a broad range of organisation sizes; the smallest would inevitably have quite different supplier expectations than the biggest.

They were asked to evaluate their main software and hardware supplier and some also gave an assessment of another current, but randomly chosen, supplier. The companies evaluated most often were Microsoft, Compaq/HP, IBM, Cisco, Sun, Dell, Oracle, 3Com, Adobe and Seagate. Given that less than half of the respondents – 47% -- indicated a desire to continue doing business with their current suppliers, it’s a list IT vendors are almost better off than on.

But as always in such studies, you can draw different conclusions depending on how you slice and dice the data. For example, the desire to change supplier doesn’t mean customers will in a hurry. Almost a third of the respondents – 29% – say they are likely to continue doing business with the incumbent despite being less than pleased with the relationship. Blame inertia: for more than half of those surveyed (58%), the time, effort and cost involved in switching is enough to stop them doing so.

Another group, however, representing more than a fifth of respondents, declared themselves both disinclined to continue dealing with an existing supplier and unhappy with the relationship to date. And overall, less than half (44%) would lose substantial financial investments by switching to another company, so barriers to switching are not comprehensive. Yet three-quarters planned to continue existing supplier relationships for the next year.

While some of those numbers might appear contradictory, IT vendors are unlikely to find them very comforting. The study authors suggest the discomfort is of vendors’ own making. Vendors encourage high expectations among buyers that can be hard to meet. The more innovative may release bug-ridden products while the more conservative are labelled as lacking innovation. Then, once a buyer has made a choice, they can feel locked into the investment.

Considering the challenges, Walker Information judges suppliers to be actually holding their own in establishing good customer relationships. And here’s where the contradictions really start piling up: 80% of respondents were “very satisfied” or “satisfied” with their IT suppliers and 54% saw the value offered by IT suppliers as “excellent” or “very good”. Why, then, the apparent lack of loyalty?

Best not to ask, for fear of awakening scepticism of the “lies, damned lies and statistics” kind.

Part of the explanation might be that a range of people responded from within the surveyed organisations. The researchers say respondents included IT decision makers, influencers and staff. As Computerworld knows from its own experience, each of those groups is going to offer a different account of supplier relationships. Executives with high level contact – over tasty lunches -- and no hands-on experience of imperfect products, will paint a rosier picture of relations than disgruntled IT staffers who know the support line number off by heart.

We side with the latter group and urge IT vendors to invest in those relationships – by providing more of the products that enable them to do their jobs.

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